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Ogra seeks written directive on CNG licences

July 31, 2012


ISLAMABAD, July 31: Oil and Regulatory Authority (Ogra) has asked the petroleum ministry to forward written directive for not renewing the licences of CNG stations.

Adviser to prime minister on petroleum and natural resources Dr Asim Hussain has verbally told the Ogra, SNGPL and SSGC not to renew the licences of CNG stations that have completed 15 years of operations.

“This decision has been taken in view of severe gas shortage, there are other options for the motor vehicles like the LPG but there is no alternatives to natural gas for fertiliser plants and many industries,” Dr Asim said.

The official estimates are that SNGPL, which supplies gas to Punjab and Khyber Pakhtunkhwa, will face 900mmcfd shortfall in December 2012 which will rise to 1.1bcfd in January and 900 mmcfd in February 2013.

Though, Ogra was delaying the processing of renewal applications but the officials, confided to Dawn that they were waiting for policy guidelines from the government in this regard.

“Nobody wants to take the risk of executing orders on verbal directives,” said an Ogra official.

Apart from the petroleum sector regulator, the SNGPL and the SSGC are also waiting for directives from the petroleum ministry to terminate the gas supply contract of CNG stations with expired licences.

“It is too early to say if rising petrol demand in case of the closure of CNG stations can be met without increasing oil import,” an Ogra official said.

The petroleum adviser, however, expressed confidence that the Liquefied Petroleum Gas would replace CNG.

“The country has growing population and needs to expand fuel mix. The government should encourage LPG use in auto sector,” said Malik Khuda Baksh, Chairman FPCCI Standing Committee on LPG, adding, “The chances of success, however, are not bright because of infrastructure deficit”.

Meanwhile, the CNG association has said that the government functionaries were moving towards LPG at a time when almost every country of the world was moving towards CNG.

“China in Shanghai, Korea, Indonesia and Malaysia has replaced LPG by CNG,” said All Pakistan CNG association’s chairman Ghiyas Abdullah Paracha. “Even Indian government has recently announced to provide natural gas to vehicles for CNG on top priority.”

He said that the policymakers were missing one simple point that both petrol and LPG needs to be imported.